Goods transport services are one of the unorganized sectors in India yet it plays a vital role in an economy. Being transportation sector is unorganized it positioned the Government to tax those services without affecting the economy and its function which results in structuring the GST for the goods transportation sector a little complicated. In this article, we discuss the various mode of goods transport of services and related services which are exempted and taxable including the conditions attached to it.
Transportation of Goods
Taxable Goods Transport Services
1. Transportation of goods by following mode is taxable at the rate of 5% provided that credit of input tax charged on respect of goods in supplying the services is not utilized for paying IGST, CGST, GSST or UGST on the supply of service.
Transport of goods by rail
Transport of Goods in Vessel other than goods transported in containers by any person other than Indian Railways.
Transportation of natural gas, petroleum crude, motor spirit (commonly known as petrol), high speed diesel or aviation turbine fuel through pipeline
2. Transport of goods in containers by rail by any person other than Indian Railways is taxable at the rate of 12%.
3. Multimodal Transportation of Goods - Transportation of goods, by at-least two different modes of transport from the place of acceptance of goods to the place of delivery of goods by a multimodal transporter is taxable at the rate of 12%. And further the multimodal transporter has no restriction on taking credit on input tax charged on goods and services used in supplying the transportation of goods.
4. Transportation of goods services where credit on input tax charged on goods or services used in supplying the transportation of goods is availed is taxable at the rate of 18%.
Exempted Goods Transport Services
Services by way of transportation of goods
The goods transportation services provided by any of the below given mode is exempted
by road EXCEPT the services of a goods transport agency or a courier agency
by inland waterways.
by an aircraft from a place outside India up to the customs station of clearance in India.
By an aircraft from customs station of clearance in India to a place outside India up to 30.09.2022.
By a vessel from customs station of clearance in India to a place outside India up to 30.09.2022.
Transportation Services provided to Specific Goods are Exempted
Services provided by way of transportation by rail or a vessel from one place in India to another of the following goods -
Relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap.
Defense or military equipment.
Newspaper or magazines registered with the Registrar of Newspapers.
Railway equipment or materials.
Agricultural produce.
Milk, salt and food grain including flours, pulses and rice. and
Organic nature.
Goods Transport Agency(GTA):
Exempted Transportation Services provided by GTA
1. Services provided by a Goods Transport Agency (GTA), by way of transport in a goods carriage of -
Agricultural produce.
Goods, where consideration changed for the transportation of goods on a consignment transported in a single carriage does not exceed on thousand rupees.
Goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty.
Milk salt and food grain including flour, pulses and rice.
Organic manure
Relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap.
Defense or military equipment.
Newspaper or magazines registered with the Registrar of Newspapers.
2. Services provided by a GTA, by way of transport of goods in a goods carriage, to a Department or Establishment of the Central Government or State Government or Union territory; or Local authority; or Governmental agencies, which has taken registration under the Central Goods and Service Tax Act, 2017 only for the purpose of deducting tax under Section 51 and not for making a taxable supply of goods or services.
3. Services Provided to an un-registered Person
Services provided by GTA to agency an unregistered person, including an unregistered causal taxable person, other than the registered factory, registered society, registered co-operative society, registered body corporate, partnership firm whether registered or not or any causal taxable person.
4. For detailed discussion on provisions applicable to Goods Transport Agencies (GTA) services Click Here
Hiring of Goods transport Vehicle:
1. Exempted from GST
Services by way of giving on hire to a Goods Transport Agency (GTA), a means of transportation of goods is exempted.
Other Exempted Services Related to Transportation of Goods
1.Services by way of access to a road or a bridge
on payment of toll charges.
on payment of annuity.
2. Services by way of warehousing
of loading, unloading, packing, storage or warehousing of rice.
of minor forest produce
3. Services by way of storage and warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibers such as cotton, flax, jute etc., inidgo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea.
Frequently Asked Questions
1. I am single truck owner-operator and I ply my truck mostly between states, carrying the goods booked for my truck by an agent; aggregate value of service which I provided exceeds twenty lakh rupees during last year. Am I supposed to take registration?
Answer: You are not liable to registration, as services provided by way of transportation of goods by road are exempt. Notification No :12/2017-Central Tax (Rate), dated 28th June,2017 refers.
2. I own a single truck and I rent it to a major player, who provides GTA service; should I take a registration? Does my monthly rental/lease attract to GST?
Answer: Registration is not required since services by way of giving on hire, a means of transportation of goods to a GTA are exempt from tax vide entry no:22 of Notification No 12/2017-Central Tax (Rate), dated 28th June,2017 refers.
3.In my truck, I only carry fruits and vegetables, in relation to whose transportation service GST is exempt; should I take registration?
Answer: Services by way of transportation of goods by road other than by GTA or courier agency are exempted from GST vide entry no 18 of Notification No 12/2017-Central Tax (Rate), dated 28th June,2017 refers, and thus you are not liable to registration.
4. I am truck supplier/broker. My job is to get orders from truck owners. I quote the rate for transportation to GTA on behalf of truck owners and I get a small amount as commission out of the truck hire fixed by the GTA. This brokerage is paid by the truck owners. As the services provided by way of transportation of goods by road are exempt from tax, am I liable to registration?
Answer: You are liable to registration if the aggregate amount of commission received by you in a financial year exceeds Rs. 20 lakhs
5. As a transporter, am I required to maintain any records of my services of transportation?
Answer: Yes, in terms of section 35(2) of the CGST Act, 2017 you are required to maintain records of the consigner, consignee and other relevant details of the goods. Further, in terms of rule 56 of the CGST Rules, 2017 you are required to maintain records of goods transported, delivered and goods stored in transit by you along with the GSTIN of the registered consigner and consignee for each of your branches.
6. Please clarify whether input tax credit is available to the recipient of service, when the GST paid by him is at a concessional rate of 5% under RCM.
Answer: Yes, input tax credit is available in such cases.
7. When a GTA hires a truck (with driver) from another GST registered entity for the purpose of providing goods transport service to a registered recipient, whether tax credit is available to the GTA on the GST paid by him to the owner of the truck registered under GST.
Answer: : Services by way of giving on hire to a GTA, a means of transportation of goods are exempt from GST under Notification number 12/2017-Central Tax (Rate) dated 28th June 2017. When the tax is not payable, the question of taking any tax credit does not arise.
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